ERC orders PHP 9.5-B refund for Meralco customers

Customers of Manila Electric Co. (Meralco) may soon get some relief from high electricity prices as the Energy Regulatory Commission (ERC) approved the implementation of a PHP 9.5-billion refund.

In a 28-page decision promulgated July 31, the ERC directed Meralco to refund the equivalent rate of PHP 0.3448 per kilowatt-hour (kWh) within six months as a separate line item in consumers’ electricity bills.

“Implementation starts next billing cycle upon their receipt of the decision,” ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan said in a Viber message.

Distribution utilities such as Meralco are required to undergo a rate reset process which is usually a “forward-looking” exercise that requires the submission of forecasted expenditures and proposed projects for the ERC to review and adjust rates.

The refund represents a price correction for the lapsed period from January to December 2025, as delays in the rate-setting process resulted in Meralco collecting more than what was eventually approved.

The ERC said that Meralco’s actual weighted average tariff — the rate realized based on its actual revenues and energy sales — of PHP 1.5224 per kWh was higher than the final distribution charge of PHP 1.3522 per kWh.

“Considering that Meralco collected the over recovery during the regulatory years covered by the lapsed period, the Commission finds it prudent to include the interest cost in the computation of the total refund of Meralco relative to the instant case,” the ERC said.

The ERC has included interest costs for the over-recovery amounting to PHP 496 million to compensate consumers.

In a statement on Sunday, Meralco said it will comply with the ERC’s order, saying this is an approval of its two applications for refund.

“Meralco supports initiatives of the government to provide relief to consumers and ensure that they benefit from any approved refund as quickly and transparently as possible,” Jose Ronald V. Valles, Meralco senior vice-president and head of regulatory management, said in a statement.

In April, the ERC directed Meralco to accelerate the implementation of the PHP 19.96-billion rebate to help cushion the impact of the Middle East conflict on power costs.

Meralco is currently implementing the remaining PHP 14.17-billion balance, which translates to an average refund rate of PHP 0.2511 per kWh.

Similar to the upcoming refund, the reduction is the result of ERC’s order declaring July 2022 to December 2024 as a lapsed period, prompting the return of excess collections.

Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera